The approach of ASIC and how it chooses to interpret the legislation and work with the industry, is a key issue as it implements the reforms over the next year.

There are a number of regulatory reforms that will affect investment managers over the next 12 months. Some of the reforms will apply to investment managers directly, while others will be client initiated. Managers should consider how best they might respond to the reforms.

FoFA reforms can be viewed as a launching point for the professionalism of an industry that has been sullied by conflicts and salesmanship impersonating advice. It was inevitable following the Global Financial Crisis that the regulatory authorities would implement such heavy-handed measures.

The resultant self-regulation with the oversight of external supervision by ASIC and the professional associations will require a focus on internal compliance procedures. Many financial planning businesses will have a strategic imperative to evolve to incorporate the regulatory impact of these reforms. The compliance requirements need to be considered with some urgency so that planning for systemic changes and necessary training are implemented in a timely fashion and potential breaches are avoided.  To be ill equipped and not optimise future market position would result in an unsustainable business model and hasty exit from the industry post FoFA.